Segment Information and Concentration of Business Risk

12 Months Ended

Dec. 31, 2011

Segment Information and Concentration of Business Risk

Segment Information and Concentration of Business Risk

9. Segment Information and Concentration of Business Risk

Segment Information

Prior to 2011, we reported our results in two separate segments: Drug Discovery and Development and Regulus.  Beginning in 2011, we no longer consider Regulus as an operating segment because our chief decision making officer no longer reviews Regulus’ operating results for purposes of making resource allocations.  Therefore we now only operate in, and will provide financial information and results for, our Drug Discovery and Development operations.

Our Drug Discovery and Development operations generate revenue from collaborations with corporate partners and from licensing proprietary patent rights. Revenue from collaborations with corporate partners may consist of upfront payments, funding for research and development activities, milestone payments and royalties or profit sharing payments. Our proprietary technology to discover and characterize novel antisense inhibitors has enabled our scientists to modify the properties of our antisense drugs for optimal use with particular targets and thus, to produce a broad proprietary portfolio of drugs applicable to many disease targets.

Concentrations of Business Risk

We have historically funded our operations from collaborations with corporate partners and a relatively small number of partners have accounted for a significant percentage of our revenue. Revenue from significant partners, which is defined as 10 percent or more of our total revenue, was as follows:

	2011		2010		2009
Partner A	73	%	62	%	55	%
Partner B	2	%	11	%	8	%
Partner C	0	%	0	%	15	%
Partner D	18	%	9	%	2	%

Contract receivables from one significant partner comprised approximately 85 percent of our contract receivables at December 31, 2011.  Contract receivables from two significant partners comprised approximately 30 percent and 15 percent of our contract receivables at December 31, 2010.  Included in our contract receivables at December 31, 2010 was $544,000, representing 44 percent of our contract receivables, due from Regulus.